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GC
GRAPEVINE magazine
cover story
issue 02
www.gcgrapevine.com
THE private equity ISSUE
EASTERN EUROPE Why private equity is not rushing back
MARKETING Are law blogs really worth it?
MEXICO Energy Reform in a time of uncertainty
ON THE MOVE Cooley nabs Life Sciences partners in London
Investors
Wanted
Eastern
Europe is
making moves
to increase
private equity
investment,
but is it
enough?
2015
GC GRAPEVINE www.gcgrapevine.com
3
Contents
focus on private equity
6 Money matters: After a long drought private equity inches
back in Hungary
By Daniel Shoch, Editorial Assistant, GC Grapevine Magazine
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12 Hungary remains hungry for investment
An interview with Csilla Andrékó, Managing Partner,
and Dániel Kaszás, Legal counsel, of Kinstellar Budapest Office
In practice
18 Cybersecurity issues continue to plague corporate IT
departments
By Julia Foresman, Managing Editor, GC Grapevine Magazine
20 Is it too much for a lawyer to be encouraged to blog?
By Kevin o'Keefe, CEO and Publisher of LexBlog, Inc.
22 Energy reform in a time of uncertainty
By Julia Foresman, Managing Editor, GC Grapevine Magazine
26 White & Case’s Antonio Garza talks Mexico energy reform An interview with the former U.S. ambassador to Mexico
On the move
29 Round-up of lateral moves and appointments
news
32 Round-up of recent notable events
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big deals
33 Roundup of the top transactions
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Editor’s note
Contact us
Kevin Livingston
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Mobile +36 20 382 1511
Email [email protected]
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Editorial Assistant
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The indispensable
source for
GCs and outside counsel
the world over, p
articularly in the
emerging markets of
Central Europe,
Southern Europe
and Latin America
Why private equity investment is not
quickly returning to Eastern Europe
Everyone remembers the good old days before the 2008 financial crash that began in the
United States and rippled across the world.
Shoddy banking practices and simple
greed were the main factors and a lot of people got hurt. Investors everywhere took a bath. Big time. Private equity essentially
dried up for a while.
In the West things have returned to normal. But in Eastern
European countries like Hungary the return of private equity
has been a bit slower. And there are reasons.
There is also hope.
As is made clear in this issue by the lawyers on the ground,
investment has not returned to pre-2008 levels due to a variety of factors. Mainly, international banks, all of which made
unprecedented levels of acquisition financing and refinancing
available to private equity investors prior to 2008, have been
much more cautious since the crisis. As a result private equity
firms have trouble leveraging their investments, decreasing the
purchase price they are able to offer to sellers.
The crisis in Ukraine has also had a detrimental effect on the
perception of the region. For Westerners, i.e., Americans, there
is not much differentiation from Ukraine and the EU countries
that border it. There is a huge difference between Ukraine and
the countries to the west, of course, but fear is fear and in this
case there is a perception that what Russia is up to could spill
over. Whether that is realistic or not – probably not – the situation is what it is. And government regulations have not exactly
helped the situation. In many ways, changes to the law have
only made things more confusing.
For Hungary, which was once a main Eastern European target
for foreign investment, a strong degree of confidence must be
instilled.
If that can be done effectively, investors will likely follow. Not
to be cliché, but if you build it they will come.
Sincerely,
Kevin Livingston
Editor-in-Chief
GC Grapevine Magazine
Focus on
private
equity
Money matters: After a long drought private equity inches back in Hungary
6
By Daniel Shoch, Editorial Assistant, GC Grapevine Magazine
Hungary remains hungry for investment
An interview with Csilla Andrékó, Managing Partner, and Dániel Kaszás,
Legal counsel, of Kinstellar Budapest Office
12
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7
Daniel Shoch
Editorial Assistant,
GC Grapevine
Magazine. Daniel
Shoch can be reached
at daniel.shoch@
gcgrapevine.com
cover story private equity
Money
Matters
After a long drought private equity
inches back in Hungary
I
The unfriendly and irregular
environment and tax system
have made banks drop financing
significantly.
Dániel Kaszás
shutterstock.com
6
legal counsel at Kinstellar
n the beginning of the
new millennium, Central
and Eastern Europe
experienced a steady
flow of increased foreign
direct investment (FDI). In the
five years between 2003 and
2008 there was nearly a EURO
2 billion increase of FDI in the
region. Hungary was one of the
most popular destinations for
this investment and private
equity took advantage. They
rode this wave of investment
in the country with a couple
landmark transactions such
as Mid Europa’s investment
in Invitel, or PineBridge’s
investments in TriGranit. Then
the crisis hit.
In the next five years Central
and Eastern Europe as a
whole experienced a drop in
FDI of approximately EURO
1.7 billion. Private equity
investment in the region and
in Hungary specifically proved
to be no exception. While
there has been a mild rebound
in the last couple of years,
with comparatively smaller
transactions, the aftermath of
the crisis is still felt.
“The main difference between
the period before 2008, and
after 2008, is the availability of
financing. The unfriendly and
irregular environment and tax
system have made banks drop
financing significantly,” said
Dániel Kaszás, a legal counsel in
the Budapest office of Kinstellar.
“I think the whole economy, as
well as the M&A and private
equity investment market is
suffering from this.”
Domestic, regional and
international banks, all of which
made unprecedented levels
of acquisition financing and
refinancing’s available to private
equity investors prior to 2008,
have been much more cautious
since the crisis. As a result
private equity firms have trouble
leveraging their investments,
decreasing the purchase price
they are able to offer to sellers.
9
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Budapest panorama: Countries like Hungary are attempting to grow investment to pre-2008 levels.
In recent years there have been
quite a lot of changes in the tax
measures and legal framework by
the government.
Csilla Andrékó
Managing partner of Kinstellar Budapest
8
Still, some sectors that continue
to see activity.
“If one looks at the last few
years, there continues to be some
private equity investment in
Hungary despite the downturn
and relative struggles in the
economy,” explains Rob Irving,
the Budapest-based EMEA cohead of private equity at White &
Case LLP. “For example, in sectors
such as consumer goods Hungary
has tended to be a very attractive
place for private equity to invest
in,” continues Irving. “Sectors
where the manufacturing
happens here in Hungary, but the
finished products are exported,
are very popular.”
Despite being strong in
the rest of the CEE region,
sectors such as food retail,
telecommunication and banking
have been less attractive for
private equity investment in
Hungary in the last few years.
And there are reasons.
“This can be explained by
the significant amount of
government presence in those
industries through regulations
and special sector taxes,” Irving
said.
The government is
continuously changing the
private equity landscape. “In the
recent years there have been
quite a lot of changes in the tax
measures and legal framework
by the government” said Csilla
Andrékó, the managing partner
of the Kinstellar Budapest office.
Particularly in regulated
industries, all these changes
make it difficult for an investor
to predict the future of their
investment. The uncertainty is
just enough to turn them away
to other opportunities. The
Photo by Christian Mehlführer
new Civil Code that recently
came into effect in Hungary
hasn’t helped in providing legal
certainty at the moment either.
The new Civil Code entered
into force in Hungary on March
15, 2014. Unlike previous tweaks
this was the first major overhaul
of the Hungarian Civil Code
since 1959.
“As a whole, it didn’t have
much effect on investment.
But it’s a big thing for us
lawyers,” Kaszás said. “The new
Code introduced certain new
concepts, which have been adrift
in Anglo-Saxon jurisdiction. So
the provisions are a significant
change for the legal community
more than the investors,” he
continues.
“The new Code is good, and
it faces certain issues that we
couldn’t clearly advise under the
old Civil Code. Overall, the new
Code is strong, creditor-friendly
and enforceable so there isn’t
much problem for the future, just
a little bit of confusion at the
moment,” Andrékó said.
“Basically the investors
want to expect a stable and
predictable environment. They
want to focus on business
issues rather than legal issues,”
Kaszás added. “When you start
explaining the uncertainty of
the new Civil Code, investors
immediately get a bit nervous.
This will be a constant struggle
for at least another year”
Andrékó said.
So what else can the
government do to promote, or
make private equity investment
easier? The lawyers bring up
the analogy of venture capital,
which is similar to private equity
but generally focuses on earlierstaged, less mature businesses.
Many European countries have
introduced government-lead
business incubation programs
to jump start new companies
and aspiring entrepreneurs who
have the right ideas but lack the
funding or know-how to execute
a successful business.
For example in the United
Kingdom, the New Enterprise
Allowance (NEA), helps people
on benefits to fund their own
business. As of September 2014,
more than 50,000 businesses
have been set up throughout
England, Wales, and Scotland.
Not only does the grant present
these entrepreneurs funding, it
also offers seasoned mentors to
help with business decisions.
However, introducing such a
scheme would bring forth many
challenges. Who chooses the
company that gets the funding?
Why them? Rob Irving believes
that instead, the government
should simply focus on
setting up a friendly business
environment.
“The government's role in
this is to pay attention to the
laws generally, to make them
transparent and predictable for
any investment, be it private
equity or venture capital,” he
said. “So far, the government
has not been hostile to private
equity, which is good, and
private equity investors know
to avoid investing in certain
Basically the investors wantvto
expect a stable and predictable
environment. They want to focus
on business issues rather than legal
issues
Dániel Kaszás
legal counsel at Kinstellar
sectors. If the government wants
them at some point to invest
in those sectors, they will have
to provide a more predictable
environment,” Irving said.
Irving certainly doesn’t
stand alone in believing that
the government needs to
comfort investors by creating a
foreseeable economic landscape.
“The Hungarian government
has to inspire confidence
in investors and create an
investor-friendly, predictable,
legal environment. And not to
forget, a tax system that attracts
investors,” Kaszás said.
11
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Investment Bank Group and
other financial institutions.
These funds are offered to EU
Member States through their
national or regional Managing
Authorities, providing the
opportunity for countries to
use part of their EU Structural
Funds to finance SMEs
(through loans, equity and
guarantees) in a more efficient
and sustainable way. The
scheme has allowed more and
more young entrepreneurs
throughout the EU, including
Hungary, to take the leap
of faith in becoming selfemployed.
An increasing number of
young Hungarians have the
background and mentality to
take this leap.
“If I look around, a lot of very
interesting young Hungarians,
many of whom have studied
and worked abroad, are coming
back and have great technology
Many lawyers are optimistic about
the future of private equity in
Hungary
Dániel Kaszás
legal counsel at Kinstellar
Photo By Jericho
10
In short, the focus at the
moment should be to promote a
healthy business environment.
All this said, many lawyers
are optimistic about the future
of private equity in Hungary.
In the past, Hungarian
citizens faced an
entrepreneurial challenge.
The mentality of the general
population was relatively riskaverse. Individuals would rather
stay in a secure job than chase
their dreams on a road filled
with risk and uncertainty. But
this is changing with the help
of so-called JEREMIE funds and
an increasing number of young
Hungarians who have studied
or worked abroad.
JEREMIE Funds are a joint
initiative developed by the
European Commission in cooperation with the European
oriented ideas,” said Irving.
“Because there is relatively less
competition in the Hungarian
technology sector than in
the U.S. or Western Europe;
the young, technology-savvy
Hungarians are able to go in
and work with some of the
bigger Hungarian companies
and build up their technological
platforms around them, before
exporting the technology.
Some of these companies have
been and will continue to be
attracting international venture
and private equity investment.”
The development of
Hungarian technology oriented
companies such as Prezi, NNG
and others is one of the many
reasons to be optimistic about
the long-term health of private
equity in the region. Moreover,
the Hungarian government is
showing signs of helping.
“The Hungarian government
has started giving out positive
signals. They have recently
announced that they are going
to halve the taxes levied on
banks, so that’s a huge step,”
Andrékó said.
Whereas firms had difficulty
financing their investments
right after the crisis, a tax
cut would allow banks to
increase loans significantly.
As Andrékó explains, “this will
aid the banks to move towards
financing new projects in the
Hungarian market.”
Although no one can predict
exactly what will happen in
next few decades, if the legal
and regulatory landscape for
investors continues to become
more stable and predictable,
the future of Hungarian private
equity investment is bright.
■ Daniel Shoch
Editorial Assistant, GC Grapevine
Magazine. Daniel Shoch can be reached at
[email protected]
Complexity isn’t
the challenge.
Simplicity is.
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Prior to the 2008 crisis, we
saw quite a lot of private equity
investment coming into the country.
Csilla Andrékó
managing partner of Kinstellar Budapest
interview private equity
Hungary
remains hungry
for investment
Problems in the Ukraine and a complicated
tax code have mean private equity
investment is slow to trickle in
Csilla Andrékó
Managing Partner
Kinstellar Budapest
Office
Csilla Andrékó is the
head of the firm-wide
Banking, Finance
& Capital Markets
and Restructuring &
Insolvency practices
Dániel Kaszás
Legal counsel
Kinstellar Budapest
Office
Daniel Kaszás
focuses on M&A,
corporate law,
competition law and
dispute resolution
12
shutterstock.com
A
The crisis had quite an impact
on that, especially because those
who invested in that time period
couldn’t really get out after three
or five years as they normally
do. So there were two things the
investors could do: They either
held on to the investment and
now that the conditions are
better they can get out with some
profit, or they had to sell original
How was the climate of
investment to completely get out.
private equity investment in
The latter were actually quite
the Hungarian economy prior to
difficult and painful exercises.
the 2008 crisis and how has it
We have seen in some cases
changed since?
where other equity funds were
Csilla Andrékó: Prior to the
brought into the structure, or
2008 crisis, we saw quite a lot of
private equity investment coming even exotic investors from
countries like China were coming
into the country. This happened
in and buying the investments
in various sectors; for example,
from the original private equity
the telecom sector, the chemical
industry and energy sector saw a firms. Sometimes they even
lot of activity. Basically, between had to write off the investment
completely, meaning they had
2006 and 2008 there was a lot of
to get out with no gain at all. For
private equity investment.
n interview with
Csilla Andrékó and
Dániel Kaszás in the
Budapest office of
Kinstellar about the
private equity climate in Hungary
over the past few years and some
current issues revolving the
investment landscape.
GC GRAPEVINE www.gcgrapevine.com
The unfriendly irregular
environment and tax systems have
made banks drop financing
Dániel Kaszás
legal counsel at Kinstellar
many, that was a big loss. This all
happened because of the crisis.
Therefore, from what we’ve
seen, until now, is that new
private equity investments
were not really coming into the
country. During the crisis, a lot
of people were checking out
new opportunities, but were a lot
more cautious. Now, however, it
seems to be that they are getting
more interested in buying assets
and coming into infrastructure
investments and larger deals,
but this is more or less a new
phenomenon.
The other thing that is really
important is that although
private equity investors are
ready to take on higher risk than,
lets say, ordinary banks who
are financing a transaction, it
doesn’t help that the Hungarian
government in recent years
has been introducing a lot of
changes in the legal framework
and tax measures in the market.
Those were all making it a bit
more difficult to foresee what is
coming next. To some extent, this
isn’t just an issue for Hungary,
but to the region as a whole.
Now we have a war in Ukraine,
which clearly has an effect on
the region. And for many firms,
like American private equity
firms, they have a hard time
differentiating between the
countries. They will look at the
region as a whole. One exception
would be Poland; since it is so
large It attracts investment on its
own. But the rest are more or less
affected by regional situations
like the war.
After 2008 there was a
difficulty to find good private
equity investment in Hungary.
Now what we are seeing is that
they are either getting out of
their original investment and
refinancing, or trying to find
other opportunities. But like I
said: unfortunately the crisis
in Ukraine is affecting the
investors thinking when they
are evaluating the political and
economical risks. However, still
after all this – in financing and
refinancing -- I can see more
private equity investors coming
in. But clearly, it’s not at the level
that it was before 2008. There
was a large drop-off, but now
luckily it’s picking up again.
risk that the government is very
“innovative” in coming up with
new tax laws. That is not very
encouraging for investors.
Dániel Kaszás: What I can add
to what Csilla said is that the
main difference between the
period before 2008 and after 2008
is the availability of financing.
The unfriendly irregular
environment and tax systems
have made banks drop financing
significantly since 2008.
I think the whole economy,
as well as the M&A and private
equity investment market is
suffering from this; however,
there are a few exceptions. The
chemical sector, energy sector
and the real estate sectors
seem to be picking up. It seems
nowadays that if a private equity
investment is made, it will be
made in these areas. These
are examples from our own
transactions. So even though
investment is coming back, it is
coming back quite slowly.
Kaszás: Also, like Csilla
mentioned, the war in Ukraine is
having an effect on us as well as
the whole CEE region. Since the
EU and U.S. introduced sanctions
against Russia, Russia responded
by increasing sanctions against
imported products, which we
are especially suffering from.
This is a big impact as Russia
is quite a substantial market for
agricultural products and food
products. Poland is also suffering
from this. So the war is having
a huge negative effect on our
economy. This further weakens
the position of our economy as a
whole, so that is also something
that we would like to get rid of
from an economic perspective
Hungary’s new Civil Code
entered into force on March 2014.
What kind of impact has the new
legislations had on private equity
investment as a whole, if any?
Kaszás: As a whole it didn’t
have much effect on investment,
but it’s a big thing for us lawyers.
This is because the previous
Civil Code was written in 1959,
when there was obviously a
completely different market
environment. And even though
it has been amended a couple
of times since then, we really
needed to modernize it. The new
Code introduced certain new
concepts, well new concepts
for us (laughs), which have
been adrift in Anglo-Saxon
jurisdiction. For example the
new rules on damages claims. So
they are significant things for the
legal community more than the
investors.
Andrékó: In energy also, the
problem seems to be that there
are a lot of regulatory changes
and tax increases. When private
equity investors are thinking
about the three or five-year
period for their investment,
these added taxes would actually
frighten them off. They would
really like to see the whole costside, which is unfortunately
very unpredictable right now. So
basically in Hungary there is an
added political and legislative
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Andrékó: We can say that
the new Civil Code is not less
creditor or investor friendly than
the previous ones. They actually
introduced some new concepts
that might be quite helpful. The
only difficulty is that now we are
in this interim period in which
we are still conducting certain
transactions that were governed
by the previous code. If you want
to modify and refinance then you
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have to decide which code you
want to use.
So that is a bit of a challenge
for everybody as most of the
new code’s rules are untested
in the sense that we don’t really
have court cases or guidance
in this respect. That creates a
little bit of uncertainty, which
has a negative impact on new
transactions as it increases
insecurity. For private equity
specifically, the issue is that
they don’t like to deal with legal
problems and don’t want to
discuss them in length, they just
need something easy that works
and doesn’t complicate things.
This is a problem because now
we have to educate everybody
and discuss all these new legal
points.
Investors aren’t too happy
with this because they don’t
want to be bothered by the
legal problems. They would
rather focus on the business.
So when you start explaining
the uncertainty of the new Civil
Code they immediately get a bit
nervous. This will be a constant
struggle for at least another year
where we try to put together
the best structure. Investors
don’t like to hear that there are
complicated issues.
Kaszás: Yes, basically the
investors want to expect a stable
and predictable environment.
They want to focus on business
issues rather than legal issues.
Andrékó: Yes, but even after all
this we can still say that the new
Code is …
Kaszás: A good thing
Andrékó: And it is workable. It
is good and it faces certain issues
that we couldn’t clearly advise
under the old Civil Code. The
only issue is the interim period,
which brings up uncertainties
and complications with a new
registry, legal techniques and so
forth. But overall the new Civil
Codes is strong, creditor friendly
and enforceable. So there isn’t
much problem for the future, just
a little bit of confusion at the
moment.
In several European countries,
Private Equity in
Hungary
Since 2008, following the financial crisis, large
investors have fled Hungary
The Hungarian government has introduced
changes in the legal framework and tax measures
in the market that are making it more difficult for
investors to foresee what is coming next
Proximity to Ukraine has made Western investors
skeptical
such as the UK, they have
introduced governmentsponsored business incubation
programs. How would that
impact the Hungarian economy,
if it would impact it at all?
Kaszás: In 2010, they launched
the JEREMIE fund, and that
resulted in the Hungarian state
wanting to participate in hybrid
funding. This made them want to
turn the private sector, venture
capital, toward enterprises that
were preferred by the Hungarian
state. These were innovative
startup firms, which have not
been in the focus of private
equity firms and venture capital
firms before.
That all had a positive effect
on small and medium sized
enterprises. They were benefiting
from all these funds. One of them
in particular called the Széchenyi
Capital Investment Fund (SZTA).
Through these funds many small
and medium sized enterprises
actually managed to develop
their business or further develop
them, so I think that is the
biggest positive impact from this
sort of government support.
What are some challenges you
foresee the government having to
face in the future while working
on strengthening the role of
private equity investment in the
economy?
Kaszás: The Hungarian
government has to inspire
confidence in investors and
create an investor-friendly and
predictable legal environment.
Not to forget, a tax system
that attracts investors. The
government has been squeezing
banks with different taxes and
introducing some new ones. All
17
GC GRAPEVINE www.gcgrapevine.com
these taxes do the exact opposite
of what we would like – they do
not support investment.
Another thing, which is
political, but also has a big
effect on investment: is that
they are trying to strengthen the
relationship with Russia. This
is against the interest of the
European Union and in the eyes
of private equity investors this is
not something that is attractive.
´
Andrékó: I would say that
the Hungarian government
has started giving out positive
signals. They have announced
that they are going to halve
the taxes levied on banks, so
that’s a huge step. It truly helps
the banking and financial
institutions in Hungary and it’s a
very positive sign.
The other thing that they have
been doing, and communicating,
is that they want to help the
banks clean their loan portfolios.
They have made several steps
towards helping them pay their
foreign exchange loans, which
have become so significant
because of the huge change
in exchange rates. So some of
the loans that were originally
in Euro or Swiss Francs have
been converted into Hungarian
Forints.
Furthermore, they have helped
move bad, non-performing
portfolios. So this is a clear
step that they are trying to
help the financial institutions.
This will aid the banks move
towards financing new projects
in the Hungarian market. Also,
the Hungarian government
has decided to increase state
When an investor sees that a
country is imposing newer
and newer substantial taxes in
various sectors it puts them off from
trying to enter that market.
Csilla Andrékó
Managing partner of Kinstellar Budapest
16
ownership in the banking sector.
They purchased MKB Bank,
Budapest Bank, and are rumored
to purchase another one on the
market. Therefore, this is another
step towards encouraging banks
to lend money to companies for
projects. They also have claimed
that they will not keep these
banks under state ownership, but
will instead restructure them and
sell them on to the private sector.
So in my mind everything I
have mentioned above is very
encouraging and helpful. These
are all good signals to investors
that they want to help the
finance sector to function better.
But as Dániel explained, the past
damage has been done, and it’s
difficult to build up trust within
the investors.
When an investor sees that
a country is imposing newer
and newer substantial taxes in
various sectors it puts them off
from trying to enter that market.
So even if they start lending
money they have to send out
other signals; for example, not
changing the laws substantially
and not constantly making
regulatory changes. That would
be very important because if you
feel that a country is not stable
with its legal system, and its
constantly changing, it’s not very
encouraging for investors. So
they have to build up trust again
with western investors.
Like I mentioned before,
investors look at a region and try
to decide which country is the
best place to go to, and where
they can see the least risk, or at
least manageable risk. We don’t
come at the top of that list. We
can see that the Czech Republic,
Romania, Slovakia and others
are getting many more investors
than us at the moment. They
have seen a much faster recovery
from the crisis than us; our
recovery has been much slower.
I think that it seems like they
are almost avoiding us because
of these political and legal
uncertainties.
Despite all of that, would you
still say that the near future of
the Hungarian private equity
landscape is bright?
Andrékó: I’m personally quite
optimistic. Like I said before,
the signals that the government
has recently given out are a
very positive thing. Certain
sectors are coming up and we
have recently seen private
equity interest in real estate and
infrastructure deals. So there are
positive things certainly. And in
my opinion, if the government
carries on with this investor
friendly attitude then we can
gain back the trust of investors
very quickly.
Traditionally, Hungary has
been one of the prime locations
where foreign direct investment
was going into, and for private
equity especially, if the risk is
manageable, it’s a great place
to go into. So even if the risk is
slightly higher, investors won’t
mind, as they might be able to get
a higher yield. So in my opinion
the future is definitely bright.
In Practice
Cybersecurity issues continue to plague corporate IT departments
18
Is it too much for a lawyer to be encouraged to blog?
20
Energy reform in a time of uncertainty 22
White & Case’s Antonio Garza talks Mexico energy reform 26
By Julia Foresman, Managing Editor, GC Grapevine Magazine
By Kevin o'Keefe, CEO and Publisher of LexBlog, Inc.
By Julia Foresman, Managing Editor, GC Grapevine Magazine
An interview with the former U.S. ambassador to Mexico
Kaszás: Getting bright.
Andrékó: Getting bright,
that’s right. But it still definitely
needs some work from the
government’s side at the
moment. One thing, which is
again not up to the Hungarian
government and no one here
can really do anything about, is
the situation in Ukraine. If that
is going to escalate further it
might have a very bad impact
on us. Hungary borders Ukraine
so we are dangerously close to
this war. We are just hoping it
will be settled.
Are there any specific sectors
in Hungary that you can predict
will have a strong presence in
the private equity market in the
near future?
Kaszás: Maybe tourism,
actually? It is less affected by the
crisis and the number of tourists
coming here is increasing. So I
would say the hotel sector and
real estate development are
good. Also the chemical sector is
interesting.
Andrékó: Along with the
energy sector. ■
shutterstock.com
Oil platform silhouette in gulf of mexico
19
GC GRAPEVINE www.gcgrapevine.com
Julia Foresman
Managing Editor, GC Grapevine Magazine.
Julia Foresman can be reached at Julia.
[email protected]
Cyber security
Cybersecurity
issues continue to
plague corporate IT
departments
E
The burden of dealing with security threats is increasing each year
shutterstock.com
18
shutterstock.com
very year, the minefield
of cybersecurity issues
plaguing corporate IT
structures increases in
both frequency and severity. The
alarm shared among legal and
IT professionals is growing, as
companies are forced to invest
significantly more in robust cyberdefense.
As reported by Corporate Counsel, “the ‘2015 Security Pressures
Report’ from Trustwave Holdings
Inc. shows that the already substantial burdens in-house security
professionals face from threats to
their networks and data will likely
continue to increase. The report
finds that the always-looming cyberthreat is exacerbated by other
pressures too, like the push to roll
out IT projects quickly, lack of IT
staff and budget, and the proliferation of emerging technologies.”
More than half of respondents
to the primarily North American
1,000-person survey reported
heightened pressure between
2013 and 2014 to enhance security
of their organization’s networks. Roughly the same number foresee
additional pressure, while just over
40 percent estimate the pressure
to remain neutral or decrease. The
urgency of these heightened measures appears to be coming from
the top down, as board of directors,
owners, and C-suite executives
account for more than 60 percent
of the reported mandate.
As Greg Rosenberg, security
engineer at Trustwave, told CorpCounsel.com, “the high-profile
nature of recent breaches has put
the tops of organizations on alert,
and from fines and fees to litigation
and brand damage, executives
want to ensure that they don’t have
to deal with the consequences of
a major breach happening at their
organization.”
Compounding this pressure
are several elements- including
allocating sufficient time, resources, and staff that legal and
IT professionals claim fuel the
stress. For example, more than
three quarters of those polled expressed frustration that products
are often introduced before all the
potential vulnerabilities to hackers
have been removed or addressed. Furthermore, more than 4/5 of
respondents expressed interest
in additional staff support, with
almost one-third of those surveyed
wishing they could at least quadruple their resources. According to Rosenberg, managed security services are often the
answer because, as they tend to
more efficiently allocate resources,
managed security service professionals are dedicated to cybersecurity on a macro scale and they
have access to an amplified share
data set.
While external threats overwhelmingly pose the largest reported risks, insider threats are
on the rise as well. According to
Corporate Counsel, “most said that
the risk of an insider accidentally
leaving the company exposed to a
breach caused more pressure than
the possibility of a malicious insider. The most-cited insider threat
in the survey was unauthorized
file transfer; only a small number
of respondents—9 percent—cited
weak passwords.”
Beyond the risks posed by external and insider actors, nearly
half of respondents indicated that
cloud computing as a new and increasingly relied-upon technology
posed the most security risks. Personal mobile devices, applications,
and reckless use of social media
also registered as notable threats.
■ Julia Foresman
Julia Foresman can be reached at
[email protected]
21
GC GRAPEVINE www.gcgrapevine.com
marketing blogs
Is it too much
for a lawyer to
be encouraged
to blog?
It might seem that way at first, but the pros generally
outweigh the cons
20
I have been blogging for over
eleven years, most of the time
encouraging lawyers to blog and
when they do, to blog better. I am
sure many of you have seen it as
more of a hammer than encouragement.
Define the perfect niche strategy,
identify and listen to the influencers, master the use of a news
aggregator, engage the influencers
by quoting them (engage by linking, don’t just write summaries of
the law), write in a conversational
style, use the perfect imagery, and
build social media equity by sharing others content so that they
share your own.
Iowa! How is a lawyer going to
master all of this while working
her or his tail off and raising a
family?
Is all of it necessary for success?
Maybe it isn’t.
I think back to Attorney Dave
Donoghue (@rdd) calling me almost ten years ago. He was at
Delco Electronics, I believe, and
wanted to be doing IP litigation in
Chicago.
Together (more him) we came up
with the idea of a blog focused on
Chicago IP litigation.
Dave would cherry pick relevant
cases from the District Court and
the 7th Circuit Court of Appeals.
He’d do brief summaries of cases,
something a practicing lawyer
may be apt to do, and post them to
a good looking blog that would be
search engine optimized, kicking
out email updates and RSS feeds,
and providing a searchable archive
of the cases.
The Chicago IP Litigation Blog
worked to help get Dave a job at
DLA and then a position at Holland
& Knight. The blog put Dave on the
national stage and has generated
significant work and revenue.
Wilmington Delaware Attorney
Francis Pillage (@fpileggi) contacted me at about the same time.
Much of Francis’ litigation work
was before the Delaware Court of
Chancery, widely recognized as the
nation’s preeminent forum for the
determination of disputes involving the internal affairs of the thousands upon thousands of Delaware
corporations and other business
entities.
Francis read decisions from the
Chancery Court as part of his work.
Rather than hold the summaries
to himself, he decided to post summaries of some of the cases, with
some commentary, to a blog.
The Delaware Corporate and
Commercial Blog brought Francis
notoriety among regional judiciary
and lawyers across the country.
Like Dave, he has generated significant business as a result of his
blog.
When Dave and Francis contact-
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ed me I didn’t know half of what
I know today about blogging and
social media. That was probably
fortunate for Francis and Dave.
Imagine if I ran them through the
10 things you need to do to blog
well which I mentioned above.
I am not saying a law blogger
should not aspire to achieve these
things. But looking at the accomplishments of Dave and Francis, it
may not be necessary.
There are hundreds, if not
thousands, of niches (legislation,
subjects, courts, agencies, states,
locales) for which others would
appreciate being kept abreast
of decisions and developments.
They’d rather see relevant summaries, with a little commentary, from
a practicing lawyer with a keen eye
on a niche, than a legal publisher.
Take a look at the blogs of Francis and Dave. Could you do this for
a niche? Sure, it takes work. Those
who achieve more, tend to work a
little harder.
But with the right set up,
branding, design and development, SEO, marketing, and
support, when needed, you probably could achieve great things.
I’d like to see blogging done
better, as we have characterized it
at Weblog, but maybe I am asking
more than I need to.
What do you think? ■
kevin o'keefe
CEO and Publisher of
LexBlog, Inc.
GC GRAPEVINE www.gcgrapevine.com
23
Oil companies are not the only
energized players at the table.
Service providers are equally
invested.
energy mexico
Energy reform
in a time of
uncertainty
The end of the state monopoly means potential new
investment in Mexico, but low oil prices loom
F
Julia Foresman
Mexico City-based partner with Chadbourne & Parke
expressed interest.
Yet oil companies are not the only
energized players at the table. Service
providers are equally invested in what
promises to be a lucrative new chapter in
the economy. And as oil prices continue to
languish below $50 a barrel there is great
anticipation about how Mexico and the
investment community will manage in a
time of such great uncertainty.
“For us, the reform is significant
because it is bringing opportunities for
everyone in Mexico and worldwide,”
said David Jimenez Romero, a Mexico
City-based partner with Chadbourne
& Parke. “As service providers we
definitely have a significant role advising
clients on upstream and downstream
activities and in the power sector. It’s
a very comprehensive reform, which
will bring us significant opportunities.”
Indeed, the Chadbourne team alone has
been engrossed in analyzing the law
(which is no easy task with 30 secondary
implemented laws and regulations
thereto), advising clients on the overall
legal framework and starting to work on
the tenders.
The reform has been expected to draw
billions of dollars of investment to develop
complex reserves, such as those in deep
waters of the Gulf of Mexico and in shale
(Pemex)’s oil and gas sector dominance,
as well as that of the state-owned
electricity company Comisión Federal de
Electricidad (CFE).
Mexican officials expect the watershed
reform will draw new investment to the
energy sector by private firms seeking
to develop or distribute Mexico's rich oil
and gas resources. Until now, bringing in
private sector participation and foreign
direct investment in particular was
hamstrung by Mexico’s Constitution,
which enshrined state ownership over
all resources. Now as Pemex and the
energy sector transform, companies will
get a taste what’s to come with the start
of the first licensing round. And already,
energy giants ExxonMobil, Shell, BP, and
Repsol, as well as Chinese, South Korean,
and Russian oil and gas companies have
shutterstock.com
Managing Editor, GC
Grapevine Magazine.
Julia Foresman
can be reached at
Julia.foresman@
gcgrapevine.com
or the first time in 77 years,
Mexico is poised to reap the
benefits of the energy sector’s
liberalization as the state’s
monopoly is finally coming to a
long-anticipated end.
In December 2013 Mexico’s Congress
passed a constitutional reform to open
the country’s oil, gas and electricity
sectors. And in August 2014, secondary
legislation was also passed through the
House and Senate, including nine new
laws and amendments to 12 existing laws,
thereby establishing a legal framework for
opening Mexico’s energy industry up to
private investment.
The overhaul was signed into law
by President Enrique Peña Nieto and
effectively ended the state-owned
oil company Petróleos Mexicanos
David Jimenez Romero
22
25
GC GRAPEVINE www.gcgrapevine.com
Great expectations have built over
the last year and those expectations
have been fulfilled, particularly with
respect to timing
David Jimenez Romero
Mexico City-based partner with Chadbourne & Parke
gas formations in northern
Mexico. To this point, advisors
are largely pleased with the state
of progress.
“Great expectations have built
over the last year,” Jimenez
said, “and those expectations
have been fulfilled, particularly
with respect to timing. At
the same time, however,
international companies, while
clearly interested, have been
cautious in the face of plunging
energy prices and a political
24
environment long plagued with
a reputation for instability and
lack of transparency.”
Still, the major players are at
the table.
“The types of client we have
been seeing out of this reform
are comprised of all sizes; all
major companies (IOCs, etc.), as
well as independents and their
service providers,” Jimenez said.
“Importantly, we’ve also been
advising Mexican companies,
many of whom worked for
Pemex in previous years. I
project that at least five or six
Mexican companies will be very
competitive in the E&P space.”
As any practitioner on the
ground can attest, Mexican
resources are manifold and
include in addition to vast oil
and gas reserves, an increasingly
powerful renewables sector.
While the potential for shale
oil and shale gas are high, the
expectations center largely on
deep water and ultra-deep water
resources, which require a level
of technical sophistication that
the government is working
to acquire and co-opt from
incoming major players.
On the ground for over a
decade has been Ambassador
Antonio Garza, Counsel in the
Mexico City office of White &
Case LLP, who advises a number
of companies and investors
active in Mexico’s energy sector
(see our interview with Garza,
following pages). “The reform
opened the door for private
companies to partner with
Pemex and share some of their
knowledge. Don’t get me wrong,
on many fields Pemex will still
be acting alone in its operations.
Just this past August, Pemex
emerged from Round Zero, the
very first bidding round where
it got to request which fields it
could keep, with 83 percent of
all proven and possible fields
in the country and 21 percent
of prospective reserves. But to
develop the fields it was not
granted, Pemex will surely be
looking for partners with the
experience and technology it
currently lacks. Similarly, in
areas such as deep-water and
unconventional development,
which make up 70 percent of the
country’s prospective resources,
companies with specialized
technology will be crucial for
taking the lead on production.”
As promising as the new
legislation is for Mexico, the
road ahead is not without its
challenges, particularly as oil
prices remain low. “The low
global oil prices have absolutely
changed the energy landscape
for countries across the world
and Mexico is no exception,”
Garza said. “For Mexico, an oil
producing and exporting country,
the most immediate effect is the
fiscal one, as less revenue flows
back into Pemex or is channeled
into the federal budget, which
has been receiving roughly one
third of its funding from these
energy revenues.”
Garza indicated the Mexican
government has been preparing
for this decline, by employing
an extensive annual hedging
scheme that, along with gasoline
taxes, will somewhat soften the
blow this year.
“But if prices don’t start
rebounding, then they’ll need to
make up for the lost revenues,”
he said.
Strapped by recent promises
not to raise taxes, the
government’s options are limited
to cutting spending and/or
taking on more debt. “In fact,”
Garza said, “we’ve already seen
them slash planned government
spending by over $8 billion in
response to oil prices. And with
roughly half of that earmarked
for Pemex, it’s not hard to
imagine the types of effects
that this will have for Mexico’s
energy sector, not to mention the
country’s economic growth more
broadly.
“The low oil prices are also
already impacting the first round
of bidding. On one hand, they
If prices don’t start rebounding, then
they’ll need to make up for the lost
revenues.
Antonio Garza
White & Case
definitely boost Mexican officials’
urgency to provide attractive
conditions for private companies
transparently and within the
confines of domestic politics. But
the exact effects are likely to vary
across the five stages of Round
One.”
While energy investor
confidence has certainly
been shaken, Garza and other
practitioners remain optimistic
about Mexico’s prospects.
■ Julia Foresman
Managing Editor, GC Grapevine Magazine. Julia
Foresman can be reached at Julia.foresman@
gcgrapevine.com
27
GC GRAPEVINE www.gcgrapevine.com
interview mexico
White & Case’s
Antonio Garza
talks Mexico
energy reform
The former U.S. ambassador to Mexico discusses the
changing energy landscape in the country
Antonio Garza
Antonio Garza
previously served
as the United
States Ambassador
to Mexico,
Commissioner for the
Railroad Commission
of Texas, which
regulates Texas’s oil
and gas sector, and
was vice chairman
of the Interstate Oil
and Gas Compact
Commission, which
assists U.S. states
in their energy
development and
conservation.
26
GC Grapevine recently spoke with
Ambassador Antonio Garza, Counsel in
the Mexico City office of White & Case
LLP, to discuss what he is watching
in Mexico’s energy sector. Mr. Garza
previously served as the United States
Ambassador to Mexico, Commissioner
for the Railroad Commission of
Texas, which regulates Texas’s oil
and gas sector, and Vice Chairman of
the Interstate Oil and Gas Compact
Commission, which assists U.S. states
in their energy development and
conservation. The Ambassador currently
advises a number of companies and
investors active in Mexico’s energy
sector and can be found online at
tonygarza.com.
With lower oil prices now around $50
a barrel, what impact do you foresee for
Mexico and for Round One bidding?
The low global oil prices have
absolutely changed the energy landscape
for countries across the world and
Mexico is no exception. For Mexico, an
oil producing and exporting country, the
most immediate effect is the fiscal one,
as less revenue flows back into Pemex
or is channeled into the federal budget,
which has been receiving roughly one
third of its funding from these energy
revenues.
The Mexican government has actually
been preparing for this type of drop, by
employing an extensive annual hedging
scheme that, along with gasoline taxes,
will somewhat soften the blow this year.
But if prices don’t start rebounding, and
it doesn’t look like they will anytime
soon, then they’ll need to make up for the
lost revenues. One way the government
could do this would be to raise taxes,
and since they recently promised not
to do this, their options will largely be
constrained to cutting spending, taking
on more debt, or doing a little of both.
In fact, we’ve already seen them slash
planned government spending by over
$8 billion in response to oil prices. And
with roughly half of that earmarked for
Pemex, it’s not hard to imagine the types
of effects that this will have for Mexico’s
shutterstock.com
energy sector, not to mention
the country’s economic growth
more broadly.
The low oil prices are also
already impacting the first
round of bidding. On one hand,
they definitely boost Mexican
officials’ urgency to provide
attractive conditions for
private companies -- of course
transparently and within the
confines of domestic politics.
But the exact effects are likely
to vary across the five stages of
Round One.
For example in the first
stage that is going on now -consisting of 14 shallow water
oil and gas fields off Mexico’s
southeastern coast -- the effects
of the low oil prices aren’t likely
to be as significant, given that
the breakeven price is estimated
to be around $20 a barrel over
the course of the contract.
But in the following stages,
which include the Chicontepec
field and unconventionals,
essentially shale oil and gas
fields in northern Mexico,
the higher breakeven
prices are complicating
their attractiveness. This,
compounded by Mexico’s
lack of infrastructure, water
availability, and persistent
security challenges near the
northern shale basins, is
already leading the government
to suggest delaying the bidding.
What does this reform mean
for Pemex and to what extent is
Mexico dependent on the new
influx of investors’ modern and
Crude output has dropped by a third
over the past decade, spiraling down
from over 3.3 million barrels in 2004
to a low of 2.4 million barrels in 2014
Antonio Garza
White & Case
29
GC GRAPEVINE www.gcgrapevine.com
Challenges for
Mexico
Mexico and its energy sector are facing some very
real challenges: Low oil prices and other issues,
as well as political and security events over the
past few months have shaken energy investor
confidence
sophisticated technology?
In recent years, one of Pemex’s
biggest challenges has been
trying to stem its falling oil
production. Crude output has
dropped by a third over the past
decade, spiraling down from
over 3.3 million barrels in 2004
to a low of 2.4 million barrels in
2014. There are certainly many
reasons for why this is the case.
But two factors -- the siphoning
away of Pemex’s revenues for
public finance rather than for
reinvestment and the company’s
lack of technological know-how
-- played a big role and were at
least partly addressed by the
reform.
Regarding the need to make
Pemex more independent, the
reform shifted the company
from being a state-owned
monopoly to a state productive
enterprise with the aim of
making it internationally
competitive. One of the central
ways that the reform proposed
to do this was by lowering taxes,
dropping Pemex’s tax rate down
just a bit from 70 percent today
to 65 percent by 2019. But with
the government still calling
many of the shots for Pemex,
we’ll have to wait to see what
this all actually means.
As for technological
It is absolutely in the government’s
best interest to provide fair and
attractive contracts for energy
companies,.
Antonio Garza
White & Case
28
capacities, the reform opened
the door for private companies
to partner with Pemex and
share some of their knowledge.
Don’t get me wrong, on many
fields Pemex will still be acting
alone in its operations. Just this
past August, Pemex emerged
from Round Zero, the very first
bidding round where it got to
request which fields it could
keep, with 83 percent of all
proven and possible fields in
the country and 21 percent of
prospective reserves. But to
develop the fields it was not
granted, Pemex will surely be
looking for partners with the
experience and technology it
currently lacks.
Similarly, in areas such as
deep-water and unconventional
development, which make up
70 percent of the country’s
prospective resources,
companies with specialized
technology will be crucial for
taking the lead on production.
Prior to granting the operating
licenses, the legal framework
for the contracts has to be
determined. How do you see
this playing out in the next year
or so?
It is absolutely in the
government’s best interest
to provide fair and attractive
contracts for energy companies,
especially given today’s
more challenging macroenvironment. Mexico’s
government has not yet released
all of the contracts yet, which
will go into detail on the
specifics, but we do already
have the contracts for shallow
water bidding to use as a model
for what to expect.
A few key points here are that
these initial contracts are for
25 years with the possibility of
up to a 10-year extension, and
offer an exploration period of
three years with a potential
for extension of up to two
additional years. They are
production-sharing contracts,
and though the Mexican
government’s share of the
profits will be defined in the
specific contract, there will also
be a sliding scale mechanism
to increase this rate if the
company passes a 15 percent
internal rate of return threshold.
The contracts also outline
national content requirements
as starting at 13 percent
during the exploration phase,
jumping to 25 percent when the
development starts and then
gradually increasing up to 35
percent by 2025. Companies,
however, will have various ways
of fulfilling these requirements
through purchasing Mexican
made goods or services, hiring
or training Mexican workers,
or investing in technology
transfers and infrastructure. For
future contracts, I would expect
that these details and the others
above are likely to be replicated.
You’ve been in Mexico for
over a decade. From your
perspective, how would you
characterize the challenges?
With Round One just
beginning, there is definitely
still an air of excitement
surrounding the bidding,
but this does not mean that
Mexico and its energy sector
aren’t facing some very
real challenges. The low oil
prices and other issues that I
mentioned before, as well as
political and security events
over the past few months
have shaken energy investors
confidence in Mexico’s rule
of law and overall investment
climate.
I pride myself in being clear
eyed about the challenges in
this sector and that the country
faces more broadly, and no
doubt there is serious work
to be done. Yet looking out at
Mexico’s private and public
sectors, as well as civil society,
there are also a lot of things
trending strongly in the right
direction. And it’s these positive
changes that kept me in Mexico
after my term as Ambassador
ended and lead me to be more
optimistic than ever about what
is in store for this country, its
energy sector and future. ■
On the move
Round-up of lateral moves and appointments
Moves
The
latest in house & private practice moves
From some of the biggest players in our markets
Cooley nabs two life
sciences partners in
London
Cooley is enhancing its life sciences corporate group with the
arrival of London-based partners
John Wilkinson and Nicola Maguire. Wilkinson and Maguire, who
have worked together for many
years, join from Reed Smith. They
are among the first partner additions to Cooley’s London since its
20-partner January launch.
“John and Nicola are two of
the UK’s most highly talented
life sciences lawyers,” said Justin Stock, managing partner of
Cooley’s London office. “Their
practice areas and client bases
complement many of Cooley’s
core strengths and they will add
to the incredible momentum
we’ve experienced here in London since day one. Cooley’s tech
and life sciences brand is known
throughout the world and we are
excited to be further strengthening it here in the UK.”
According to the firm, John
Wilkinson’s practice focuses
primarily on advising specialty
pharma, biotech and medical
technology companies on a wide
range of transactional, IP, regulatory and antitrust matters. Prior
to qualifying as a lawyer, Wilkinson worked for five years as a
chemist doing drug development.
He advises clients from around
the world, including continental
Europe and the United States and
numerous clients in Scandinavia.
Nicola Maguire specializes in
advising life sciences companies and other IP-rich clients at
all stages of development, from
startups to listed companies,
on collaborations, M&A, joint
ventures and other negotiated
transactions. Many of the deals
on which she advises have a
cross-border component, often
involving parties in Europe, the
United States and India.
“Cooley was well known to
both of us, owing to its platform
and prestige in the life sciences
sector,” Wilkinson said. “With the
London office now established,
the timing couldn’t be better to
explore the natural synergies
that we can collectively bring to a
GC GRAPEVINE www.gcgrapevine.com
31
Moves
Moves
global client base.”
“With its extensive footprint
in all aspects of the representation of life sciences companies,
Cooley is a natural fit for our
practices and for our clients,”
Maguire said. “We’re extremely
impressed by the current team
already in place in London,
and we’re excited to be a part
of a firm that is committed to
building such a differentiated
presence in Europe.”
Cooley opened its London
office in January with more
than 55 lawyers and other professionals. From the outset, the
office has offered depth and
expertise in key practice areas
including corporate/M&A, complex litigation, venture capital,
technology transactions, IP,
competition and privacy. On
March 9, Cooley announced the
arrival of private equity and
venture capital partner Stephen Rosen, who will join from
Olswang.
Life Sciences and Cooley
Since January 2013, Cooley
has handled 50+ life sciences
US IPOs – more than any other
law firm, and completed 80+ life
sciences follow-on offerings
raising a combined total in excess of $8.5 billion
Since 2010, Cooley has handled more than 130 life sciences M&A transactions for a combined total deal value in excess
of $27 billion
Cooley has helped life sciences companies raise more than
$3 billion in more than 150 private financings since 2013
Bird & Bird appoints
Sabine Sardou
Bird & Bird appointed Sabine
Sardou as an International Tax
group partner in their Paris
office. Sardou gained previous
experience in advising international firms on strategic tax
planning, tax defense and tax/
Cheffings as chair
transfer pricing documentation.
Boekel De Neree
promotes three
partners
Boekel De Neree expanded its
practices with the promotion
of three partners, Krijn Hoogenboezem, Marc Elshof and
Marc Kuijper. Hoogenboezem
specializes in Restructuring &
Insolvency, Corporate Litigation and Insurance. Elshof has
previous experience in commercial law practice, including
commercial contracts and litigation. Kuijper will be focusing
on competition litigation and
European law.
DLA Piper introduces
new partner Denise
Hamer
DLA Piper introduced new
partner Denise Hamer to its
Finance & Projects group; her
efforts will be split between
offices in Prague, London and
Vienna. Hamer specializes in
portfolio and asset management, distressed debt acquisitions and legal lending matters.
Franklin hires Julie
Catala Marty as a
partner
Franklin hired Julie Catala
Marty as a partner as part of
a new competition and distribution practice in the firm’s
Prague office. Marty focuses
on French and EU competition
law, luxury goods, heavy industry sectors, transport and
telecoms.
Linklaters replaces
Global Head of the
Finance & Projects
division
Linklaters welcomed Michael Kent as Global Head of
the Finance & Projects division
taking over from Jim Rice. Kent
will be responsible for ensuring
the firm’s focus on capital markets, investment management,
financial regulatory practices
and restricting and insolvency
issues.
Dentons appoints David
Tafuri and Maksym
Sysoiev as partners
Dentons appointed David
Tafuri as a partner in their
Washington D.C. office, enhancing the firm’s strategies in
sovereign representation, international business and public
international law in emerging
markets. In the process the firm
gained significant experience
in Libya, Turkey, Afghanistan
and Iraq.
Dentons introduced Maksym
Sysoiev as a partner who will
be joining the team in Kiev,
Ukraine. Sysoiev focuses on the
energy, oil and gas, agriculture,
and infrastructure industries
and specializes in providing
legal advice to renewable energy projects.
Hogan Lovells reappointed
Nicholas Cheffings as chair; he
will be responsible for enhancing the firm’s values and culture around the world and will
play an advisory role in relation
to partners as required and will
serve in the position for three
years.
McDermott Will &
Emery adds Jean-Marc
Tirard
McDermott Will & Emery welcomed Jean-Marc Tirard as a
partner in their London office.
Tirard has advised companies
and private clients on French
and international corporate and
individual tax issues as well as
advising clients on numerous
important transactions. He has
previous experience in tax and
estate planning.
Werksman hires
Michael Honiball as
director
In-House Moves
Werksman expanded with
the hiring of Michael Honiball
who joined as director and will
be heading up the firm’s International Tax Practice and has
international and corporate tax
advisory experience.
Lonza hired Andreas Bohrer,
Novartis’s animal health division general counsel. He joined
pharmaceuticals supplier Lonza
as group general counsel and
company secretary, where he
will be in responsible for legal,
compliance and intellectual
property.
White & Case expands
its Dusseldorf office
White & Case expanded its
Dusseldorf office with the hiring of two new partners, Peter
Rosin and Thomas Burmeister,
who both specialize in energy
law. The firm’s German offices
are currently undergoing recent
changes following the promotion of Oliver Felsenstein and
Burc Hesse in a bid to enhance
their growth in the German
market.
Lonza hires Andreas
Bohrer
The Co-operative
Bank expands its legal
department
The Co-operative Bank expanded its legal department
with new Head of Legal Claire
Morris. Morris gained extensive
in-house legal, regulatory and
commercial experience at Board
and senior managerial levels and
previously worked at Nationwide
as deputy general counsel. ■
Dentons appointed London
Corporate Partner Jeremy Cohen as the firm’s UKMEA CEO,
succeeding Matthew Jones
after the end of his fixed fouryear term.
Eversheds hires
Richard Eordogh as
a partner and head
of strategy in their
Budapest Office.
Eversheds hired Richard
Eordogh as a partner and head
of strategy in their Budapest
Office. Eordogh has previous
experience in international
business law and looks forward
to enhancing the team further.
Hogan Lovells
reappoints Nicholas
-tier
GC
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33
News
Big deals
Gowlings sets sights on Cuba amid thawing relations
Canadian firm launches initiative to support Canadian and
European businesses interested in entering the market
32
In the wake of a historic thawing in U.S. –
Cuban relations in recent months, Canadian
law firm HYPERLINK "http://www.gowlings.
com/"Gowling Lafleur Henderson LLP is
launching a Cuba initiative to support Canadian and European businesses interested
in entering the market. Observers have remarked that a building boom has begun to
prepare for a flood of U.S. tourists, who will
need new hotels, roads and other infrastructure.
Last December’s diplomatic talks follow a
series of market-based economic reforms in
recent years by Cuban President Raul Castro.
However, it is expected to take years before
the U.S. trade embargo on Cuba lifts.
According to Canadian news source The
Globe and Mail, “the law firm’s initiative involves well-known long-time Conservative
fundraiser Ralph Lean, a lawyer who had
been working with clients interested in Cuba
for several years while he was at his previous firms, Cassels Brock & Blackwell LLP
and Heenan Blaikie LLP.”
Foreign law firms are not allowed to practice law in Cuba, but Gowlings – under the
banner Gowlings Consulting Inc. – says it
will be partnering with a local law firm, and
its staff will continue travelling frequently to
the island.
As quoted in the law firm’s press release,
“Cuba’s current trade climate offers a unique
window of opportunity for Canadian and
international companies to strategically
position themselves in an emerging econo-
my,” said Scott Jolliffe, Gowlings chair and
CEO. “Through our Cuba Initiative, we look
forward to helping our clients take full advantage of Cuba’s expected rapid economic
growth.”
Led by partners Paul Fornazzari and Stuart Olley, and undertaken through Gowlings
Consulting Inc., firm has already been retained by several significant Canadian companies looking to enter Cuba, demonstrating
a rising interest in this emerging market.
The initiative will draw on the expertise of
numerous Gowlings professionals, including Lean and Olley, who collectively bring a
wealth of experience in helping clients with
their Cuba-related business activities across
a range of key industries, such as energy, infrastructure, real estate, telecommunications
and tourism.
In addition, Gowlings recently welcomed leading Spanish-speaking transactional lawyer France Tenaille, whose Latin
American background will be a strong asset
to the initiative.
The firm is also working with Gregory
Biniowsky, a Canadian lawyer based in Havana whose on-the-ground experience as a
consultant to foreign businesses operating
in Cuba spans two decades. Biniowsky will
utilize his extensive local knowledge and experience to help Gowlings explore the ways
in which it can best deliver service to clients
through its Cuba Initiative.
■ Julia Foresman
between Gatwick and Heathrow
Hengeler Mueller advises
Recruit Holdings on acquisition
Berwin Leighton Paisner (BLP) and Landmark
of Quandoo
Chambers have won roles on the ongoing battle
Recruit Holdings Co., Ltd. a listed corporate
venture capital company based in Japan announced the acquisition of Quandoo GmbH. Sellers are the founders of Quandoo and other investors. Quandoo operates a web-based platform for
restaurants.
Customers are offered tools for managing reservations and seating as well as up-to-date payment systems. The company is based in Berlin
and has operations in 13 countries.
Hengeler Mueller advised Recruit Holdings
on the transaction. The Hengeler Mueller team
was led by partners Thomas Meurer and Christian Möller (both Corporate/M&A) and included
partners Christian Schwandtner (Management
Participation), Vera Jungkind (Data Protection/
Compliance) (all Düsseldorf), Martin Klein (Tax),
Christian Hoefs (HR, both Frankfurt), Counsel
Patrick H. Wilkening (IT/IP, Düsseldorf) as well as
associates Christian Strothotte (Corporate/M&A),
Eva Frankenberger (IT/IP), Frederik Gärtner (Corporate/M&A), Anika Gilberg (Corporate/M&A),
Dominik B. Heß (Corporate/M&A) and Vicki
Treibmann (HR) (all Düsseldorf). Hengeler Mueller worked in an integrated team together with
the Japanese law firm Mori Hamada led by partner Kenichi Sekiguchi (Tokyo).
BLP and Landmark pick up
instructions on runway battle
between Gatwick and Heathrow Airports over
additional runway capacity for the Southeast of
England.
The Airports Commission is expected to deliver a recommendation to the government later
this year following a consultation over the need
for additional UK airport capacity.
Gatwick Airport general counsel Robert Herga
instructed Landmark Chambers’ Neil King QC
and Reuben Taylor QC to work on its bid for a
second runway.
A&O, HSF and Linklaters’ cash
in on £1.7bn takeover sale of
TSB to Sabadell
TSB accepted a £1.7bn takeover offer from
Spanish bank Sabadell.
HSF senior partner James Palmer led the team
advising TSB group, A&O corporate partners
Richard Browne and Pablo Mayor advised Banco
Sabadell and Lloyds called its panel firm Linklaters to represent it with a team headed up by
corporate partner Matthew Bland.
The deal was the final chapter in a saga, which
began with the government bailout of Lloyds TSB
in 2008 and was followed when TSB was spun
out of Lloyds in 2013.
Cleary and Slaughters advised GSK on £574m
stake sale in South African drug-maker Aspen
Slaughter and May and Cleary Gottlieb Steen &
35
GC GRAPEVINE www.gcgrapevine.com
Hamilton advised GlaxoSmithKline (GSK) on the
sale of a £574m stake in South African drug manufacturer Aspen.
Slaughters corporate and commercial partner
David Johnson advised GSK’s in-house team,
which was led by legal counsel Nicola Fell.
Cleary Gottlieb Steen & Hamilton partner Sebastian Sperber advised GSK on U.S. law.
Bowman Gilfillan partner Ezra Davids advised
GSK on South African law pertinent to the Aspen
deal.
Clifford Chance, CMS and
Freshfields played key roles in
government sale of Eurostar
stake
Firms including Clifford Chance, CMS Cameron
McKenna and Freshfields Bruckhaus Deringer
stepped up to advise on the sale of the UK government’s stake in Eurostar.
HM Treasury is set to sell its entire 40 percent
stake in Eurostar to a consortium comprising
Canadian institutional investor Caisse de dépôt
et placement du Québec (CDPQ) and UK-based
Hermes Infrastructure.
The stake itself is valued at £585.1m and Eurostar also agreed to redeem the government’s
preference share, valued at a further £172m. ■
Check in on GC Grapevine’s website for
daily news updates and responsive design
for tablet and smart phone.
www.gcgrapevine.com
Diversity and
Inclusion at CMS
CMS Cameron McKenna is a member of CMS, an
international full service law firm operating in 50 cities
across 31 countries.
As a firm we are committed to developing and supporting a diverse workplace
that is reflective of the talents of society as a whole and that recognises high
performers regardless of age, disability, gender, race/ethnicity, religion/belief,
sexual identity and sexual orientation.
We are proud to support the European Women in Business Law Awards and
gender equality in the legal sector.
34
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